Out-Law / Your Daily Need-To-Know

Singapore ruling underscores need to consider provisions against inadvertent finality of arbitral awards

03 Jun 2024, 5:09 am

A recent ruling in Singapore has highlighted the need for parties and arbitrators to consider the degree of finality in arbitral awards and assess what provisions may need to be made to revisit outstanding issues, an arbitration expert has said.

In the case between multinational home appliances company Voltas Limited and cooling systems manufacturer York International Pty Ltd (31-page / 273KB PDF) the Singapore Court of Appeal dismissed Voltas’ appeal, finding a previous award issued by an arbitrator to be the final award – that is, finding the arbitration tribunal to be ‘functus officio’ – and disposing of all remaining claims in the arbitration.

The court ruled that a conditional award can be seen as a final award if it disposes of all outstanding claims in the arbitration and if the court enforcing the decision is able to assess that the conditions in the arbitral award have been met.

The court also held that, once issued, a final award will make the tribunal ‘functus officio’ and the tribunal will no longer have the jurisdiction to decide any further issues in the arbitration, unless a reservation of the tribunal’s jurisdiction to deal with possible further issues is made ‘expressly’ – that is, not merely implied.

Though the facts of the case involved a domestic arbitration award governed by Singapore’s Arbitration Act 2001 (AA), the Court’s findings can also be applied to international arbitration awards, as Singapore’s International Arbitration Act 1994 contains similar provisions to those considered by the Court under the AA.

Wynne Tay, an arbitration expert at Pinsent Masons MPillay, the Singapore joint law venture between MPillay and Pinsent Masons, said: “Following the Voltas case, parties and arbitrators should direct specific attention to the degree of finality desired in any award to be issued, and whether provision should be made for the resolution of remaining issues in future.”

“Where the need to revisit unresolved issues is anticipated, parties may invite arbitrators to adopt the practical measures recommended by the Court – that is, to indicate that the award is not a final award or expressly reserve jurisdiction to issue a further award - to avoid inadvertent finality in the award to be issued,” she said.